What's with all this "Housing Ladder" nonsense
Discussion
I hear it time and time again that the first thing you should think of is getting onto the housing ladder after getting your first job.
From my point of view it's total nonsense and throws countless people into debt.
Agreed, if you are earning a substantial amount of money, then it's a good idea, but I also know a few friends who've tried (and they're earning reasonable salaries), and now they've had to declare themselves bankrupt!
With students from the previous generation coming out with £10k-£15k worth of student debt and new students emerging with £30k-£40k debt (so I've heard), the last thing I would want to imagine is plunging myself into another £200k worth of debt!!!
I've just come to realise that in mainland Europe, people seem to be amazed how desperate Britons seem to be to buy a home. Whatever happened to renting?
People out here seem to rent most of their lives and then buy when they are more mature or inherit from their parents. I know very very few people under the age of 40 with their own home and it makes financial (and good lifestyle), sense to me.
So apart from being totally illogical to me, what is the point of getting into so much debt so early on and not enjoying life and then affording a home properly without stress in your later life?
From my point of view it's total nonsense and throws countless people into debt.
Agreed, if you are earning a substantial amount of money, then it's a good idea, but I also know a few friends who've tried (and they're earning reasonable salaries), and now they've had to declare themselves bankrupt!
With students from the previous generation coming out with £10k-£15k worth of student debt and new students emerging with £30k-£40k debt (so I've heard), the last thing I would want to imagine is plunging myself into another £200k worth of debt!!!
I've just come to realise that in mainland Europe, people seem to be amazed how desperate Britons seem to be to buy a home. Whatever happened to renting?
People out here seem to rent most of their lives and then buy when they are more mature or inherit from their parents. I know very very few people under the age of 40 with their own home and it makes financial (and good lifestyle), sense to me.
So apart from being totally illogical to me, what is the point of getting into so much debt so early on and not enjoying life and then affording a home properly without stress in your later life?
The idea for my Mum was that when she got her first job she got a mortgage that was about the same as her rent would be and then in 25 years time she would have this huge asset and no regular monthly outgoing (rent/mortgage) so she could afford to retire earlier or at the very least work part-time.
That was the plan.
Turns out that she wanted more holidays and more little luxuries along the way and she's remortgaged to the hilt to pay for them. Now when she should be retiring and enjoying life she's working longer hours to pay for the extra mortgage every month since the interest rates went up. She would say don't go anywhere near a mortgage.
Her friend who paid off her mortgage is now retired and enjoying life without a large monthly outgoing. She would say that a mortgage was the best thing she ever did.
It's all in the timing and the situation I reckon.
That was the plan.
Turns out that she wanted more holidays and more little luxuries along the way and she's remortgaged to the hilt to pay for them. Now when she should be retiring and enjoying life she's working longer hours to pay for the extra mortgage every month since the interest rates went up. She would say don't go anywhere near a mortgage.
Her friend who paid off her mortgage is now retired and enjoying life without a large monthly outgoing. She would say that a mortgage was the best thing she ever did.
It's all in the timing and the situation I reckon.
Wat?
I thought this was going to be about the term "housing ladder".
Anyway, let's make it about that.
Let's all have a nice chat about what other sort of a thing we could call it.
Such as a "housing shelving unit".
Or a "housing pyramid".
And so on and such and such.
I am actually drunk, still.
I thought this was going to be about the term "housing ladder".
Anyway, let's make it about that.
Let's all have a nice chat about what other sort of a thing we could call it.
Such as a "housing shelving unit".
Or a "housing pyramid".
And so on and such and such.
I am actually drunk, still.
Carlchilli said:
The idea for my Mum was that when she got her first job she got a mortgage that was about the same as her rent would be and then in 25 years time she would have this huge asset and no regular monthly outgoing (rent/mortgage) so she could afford to retire earlier or at the very least work part-time.
That was the plan.
Turns out that she wanted more holidays and more little luxuries along the way and she's remortgaged to the hilt to pay for them. Now when she should be retiring and enjoying life she's working longer hours to pay for the extra mortgage every month since the interest rates went up. She would say don't go anywhere near a mortgage.
Her friend who paid off her mortgage is now retired and enjoying life without a large monthly outgoing. She would say that a mortgage was the best thing she ever did.
It's all in the timing and the situation I reckon.
Surely thats more down to the type of person - always wants more etc. My Mum is exactly like yours and paying a mortgage into retirement (plus a chunk already committed to one of those companies who wait for you to die). Some people want a better lifestyle when its beyond their means.That was the plan.
Turns out that she wanted more holidays and more little luxuries along the way and she's remortgaged to the hilt to pay for them. Now when she should be retiring and enjoying life she's working longer hours to pay for the extra mortgage every month since the interest rates went up. She would say don't go anywhere near a mortgage.
Her friend who paid off her mortgage is now retired and enjoying life without a large monthly outgoing. She would say that a mortgage was the best thing she ever did.
It's all in the timing and the situation I reckon.
I've never understood the obsession we have in this country with owning property. Massive numbers of people seem to buy houses when they'd be far better off renting.
I viewed a house purchase purely as a financial decision. If I hadn't been able to afford a good (>50%) deposit, I would be renting and my money would be in other investments.
I viewed a house purchase purely as a financial decision. If I hadn't been able to afford a good (>50%) deposit, I would be renting and my money would be in other investments.
I must admit that I don't really get the whole thing about property. Yes, I have a mortgage and a house, but that's about it. If I want something bigger then I need to earn more, its pretty simple maths for me. But why some people are absolutely fixated about house prices and their 'plan' to work up to some mansion does seem odd.
At the moment I don't really care if my house value drops by 10%. So what. I am not moving and have no incentive for a few years at least. At which I will have paid more off on my mortgage and the market should have levelled out at that point. So no problem there.
As far as I can see, the only real way of getting money out of houses is to sell up and sod off somewhere else. For example, I bought my house of a Jamaican family. Lived here for 30+ years, bought and own the house. Sell up and go back to Jamaica. Take the proceeds of the house and live extremely well back there again - seems fair to me, and given the price differences etc, they have really landed on their feet.
So people climb the 'property ladder' but for what? Are they going to see the money they have made? Is this what they really wanted? Does it really mean anything?
A friend of mine wanted to move up to the next bigger house which would have meant a £1m home. In the end he didn't do it, because he finished off his current home and got decorators in. Finished off everything 100% and ended up much happier with his home rather than moving to the next bigger one for the sake of it. Better for him, his family and lifestyle.
Property ladder? Go for what you are comfortable with - don't see the point of constantly moving up for the sake of it.
At the moment I don't really care if my house value drops by 10%. So what. I am not moving and have no incentive for a few years at least. At which I will have paid more off on my mortgage and the market should have levelled out at that point. So no problem there.
As far as I can see, the only real way of getting money out of houses is to sell up and sod off somewhere else. For example, I bought my house of a Jamaican family. Lived here for 30+ years, bought and own the house. Sell up and go back to Jamaica. Take the proceeds of the house and live extremely well back there again - seems fair to me, and given the price differences etc, they have really landed on their feet.
So people climb the 'property ladder' but for what? Are they going to see the money they have made? Is this what they really wanted? Does it really mean anything?
A friend of mine wanted to move up to the next bigger house which would have meant a £1m home. In the end he didn't do it, because he finished off his current home and got decorators in. Finished off everything 100% and ended up much happier with his home rather than moving to the next bigger one for the sake of it. Better for him, his family and lifestyle.
Property ladder? Go for what you are comfortable with - don't see the point of constantly moving up for the sake of it.
The problem is rooted in the perception of a great number of people that a house is an investment and that money should be actively made off that investment...
Whereas in previous years, a house was a home and people bought a larger house when circumstances dictated i.e. marriage, family etc or when needs allowed i.e. pay-rise, promotion.
The housing market is now fuelled by the consumer-culture and the competition-culture and the I'm Worth It-culture.
Im capitalist all the way, but i am beginning to think some regulation of how/to whom mortgage lenders can sell mortgages to is in order.
Whereas in previous years, a house was a home and people bought a larger house when circumstances dictated i.e. marriage, family etc or when needs allowed i.e. pay-rise, promotion.
The housing market is now fuelled by the consumer-culture and the competition-culture and the I'm Worth It-culture.
Im capitalist all the way, but i am beginning to think some regulation of how/to whom mortgage lenders can sell mortgages to is in order.
beanbag said:
Whatever happened to renting?
People out here seem to rent most of their lives and then buy when they are more mature or inherit from their parents. I know very very few people under the age of 40 with their own home and it makes financial (and good lifestyle), sense to me.
That's fine if you can count on getting an inheritence from you parents.People out here seem to rent most of their lives and then buy when they are more mature or inherit from their parents. I know very very few people under the age of 40 with their own home and it makes financial (and good lifestyle), sense to me.
If you rent long term you are just paying for someone else to by a house, you aren't in debt as such but you do have to keep finding the rent money from somewhere. Your rent will increase with inflation, whereas your mortgage payments stay the same(depending on interest rates) to the point were as your wages rise your payments become insignificant over time, then your house will be payed off, and renters will still be paying rent.
I can't see how renting gives a better lifestyle than getting a mortgage.
The basic principal is that house values will rise over the very long term, and rents will rise accordingly as a percentage of income loosely tied with inflation over the long term.
If you buy a house and start paying a mortgage - that mortgage payment stays the same and as your earnings increase and the economy grows, the amount you are spending on your mortgage decreases over time in real terms.
Then you get to a point at 50 years old (or whatever) where the mortgage is paid off and hey presto, no mortgage/rent to pay ever again hence your disposable income increases vastly.
I don't see what the confusion is really.
If you buy a house and start paying a mortgage - that mortgage payment stays the same and as your earnings increase and the economy grows, the amount you are spending on your mortgage decreases over time in real terms.
Then you get to a point at 50 years old (or whatever) where the mortgage is paid off and hey presto, no mortgage/rent to pay ever again hence your disposable income increases vastly.
I don't see what the confusion is really.
off_again said:
I must admit that I don't really get the whole thing about property. Yes, I have a mortgage and a house, but that's about it. If I want something bigger then I need to earn more, its pretty simple maths for me. But why some people are absolutely fixated about house prices and their 'plan' to work up to some mansion does seem odd.
At the moment I don't really care if my house value drops by 10%. So what. I am not moving and have no incentive for a few years at least. At which I will have paid more off on my mortgage and the market should have levelled out at that point. So no problem there.
As far as I can see, the only real way of getting money out of houses is to sell up and sod off somewhere else. For example, I bought my house of a Jamaican family. Lived here for 30+ years, bought and own the house. Sell up and go back to Jamaica. Take the proceeds of the house and live extremely well back there again - seems fair to me, and given the price differences etc, they have really landed on their feet.
So people climb the 'property ladder' but for what? Are they going to see the money they have made? Is this what they really wanted? Does it really mean anything?
A friend of mine wanted to move up to the next bigger house which would have meant a £1m home. In the end he didn't do it, because he finished off his current home and got decorators in. Finished off everything 100% and ended up much happier with his home rather than moving to the next bigger one for the sake of it. Better for him, his family and lifestyle.
Property ladder? Go for what you are comfortable with - don't see the point of constantly moving up for the sake of it.
"At the moment I don't really care if my house value drops by 10%"At the moment I don't really care if my house value drops by 10%. So what. I am not moving and have no incentive for a few years at least. At which I will have paid more off on my mortgage and the market should have levelled out at that point. So no problem there.
As far as I can see, the only real way of getting money out of houses is to sell up and sod off somewhere else. For example, I bought my house of a Jamaican family. Lived here for 30+ years, bought and own the house. Sell up and go back to Jamaica. Take the proceeds of the house and live extremely well back there again - seems fair to me, and given the price differences etc, they have really landed on their feet.
So people climb the 'property ladder' but for what? Are they going to see the money they have made? Is this what they really wanted? Does it really mean anything?
A friend of mine wanted to move up to the next bigger house which would have meant a £1m home. In the end he didn't do it, because he finished off his current home and got decorators in. Finished off everything 100% and ended up much happier with his home rather than moving to the next bigger one for the sake of it. Better for him, his family and lifestyle.
Property ladder? Go for what you are comfortable with - don't see the point of constantly moving up for the sake of it.
I think you will have done very well if it hasn't fallen by more in the last six months.
"At which I will have paid more off on my mortgage and the market should have levelled out at that point. So no problem there."
But where will the market level out? Another 20% down? 30?
Committing yourself to a mortgage is fine in a rising market...I "made" £60,000 between 1988 and 1991, selling just before prices collapsed, without lifting a finger, (That was a lot of money back then), however in a static or declining market I would not consider a mortgage, the first six or seven years consist of nearly all interest anyway, (The "average" person moves after this time anyhow), so it would be very easy to fall into negative equity, plus stamp duty, estate agents fees, "arrangement" fees etc are all dead money anyway.......
On the other hand, it is a good time to buy a house now, as it is a buyers market....How much further can prices fall??
It's a difficult one....
On the other hand, it is a good time to buy a house now, as it is a buyers market....How much further can prices fall??
It's a difficult one....
beanbag said:
People out here seem to rent most of their lives and then buy when they are more mature or inherit from their parents. I know very very few people under the age of 40 with their own home and it makes financial (and good lifestyle), sense to me.
Who owns all the homes then? El stovey said:
beanbag said:
People out here seem to rent most of their lives and then buy when they are more mature or inherit from their parents. I know very very few people under the age of 40 with their own home and it makes financial (and good lifestyle), sense to me.
Who owns all the homes then? 
El stovey said:
beanbag said:
People out here seem to rent most of their lives and then buy when they are more mature or inherit from their parents. I know very very few people under the age of 40 with their own home and it makes financial (and good lifestyle), sense to me.
Who owns all the homes then? 
a perfectly good treatise on the evils of property ownership hits a wall. Btw......ownership levels in France, Spain, Italy, and Ireland are all similar to or higher than the UK.
The fabled European renting obsession only really applies to Germany, Austria and Holland. So it's just not true to imply that Europeans per-se don't want to own their own home, of course they do.
off_again said:
I must admit that I don't really get the whole thing about property. Yes, I have a mortgage and a house, but that's about it. If I want something bigger then I need to earn more, its pretty simple maths for me. But why some people are absolutely fixated about house prices and their 'plan' to work up to some mansion does seem odd.
At the moment I don't really care if my house value drops by 10%. So what. I am not moving and have no incentive for a few years at least. At which I will have paid more off on my mortgage and the market should have levelled out at that point. So no problem there.
As far as I can see, the only real way of getting money out of houses is to sell up and sod off somewhere else. For example, I bought my house of a Jamaican family. Lived here for 30+ years, bought and own the house. Sell up and go back to Jamaica. Take the proceeds of the house and live extremely well back there again - seems fair to me, and given the price differences etc, they have really landed on their feet.
So people climb the 'property ladder' but for what? Are they going to see the money they have made? Is this what they really wanted? Does it really mean anything?
A friend of mine wanted to move up to the next bigger house which would have meant a £1m home. In the end he didn't do it, because he finished off his current home and got decorators in. Finished off everything 100% and ended up much happier with his home rather than moving to the next bigger one for the sake of it. Better for him, his family and lifestyle.
Property ladder? Go for what you are comfortable with - don't see the point of constantly moving up for the sake of it.
At the moment I don't really care if my house value drops by 10%. So what. I am not moving and have no incentive for a few years at least. At which I will have paid more off on my mortgage and the market should have levelled out at that point. So no problem there.
As far as I can see, the only real way of getting money out of houses is to sell up and sod off somewhere else. For example, I bought my house of a Jamaican family. Lived here for 30+ years, bought and own the house. Sell up and go back to Jamaica. Take the proceeds of the house and live extremely well back there again - seems fair to me, and given the price differences etc, they have really landed on their feet.
So people climb the 'property ladder' but for what? Are they going to see the money they have made? Is this what they really wanted? Does it really mean anything?
A friend of mine wanted to move up to the next bigger house which would have meant a £1m home. In the end he didn't do it, because he finished off his current home and got decorators in. Finished off everything 100% and ended up much happier with his home rather than moving to the next bigger one for the sake of it. Better for him, his family and lifestyle.
Property ladder? Go for what you are comfortable with - don't see the point of constantly moving up for the sake of it.
Bloody good post. I really don't see the obsession that is the housing market. The last 10 years so many people have used their homes as a cash machine but now all they see is 'insufficient funds in your account'. Your house is your home not something you use to fund a lifestyle you think you should have. As for a housing 'ladder', I don't see it when first time buyers can't even get a mortgage right now. Its more like a housing helium balloon because it seems to be getting further out of people's reach.Baby Huey said:
beanbag said:
Whatever happened to renting?
People out here seem to rent most of their lives and then buy when they are more mature or inherit from their parents. I know very very few people under the age of 40 with their own home and it makes financial (and good lifestyle), sense to me.
That's fine if you can count on getting an inheritence from you parents.People out here seem to rent most of their lives and then buy when they are more mature or inherit from their parents. I know very very few people under the age of 40 with their own home and it makes financial (and good lifestyle), sense to me.
If you rent long term you are just paying for someone else to by a house, you aren't in debt as such but you do have to keep finding the rent money from somewhere. Your rent will increase with inflation, whereas your mortgage payments stay the same(depending on interest rates) to the point were as your wages rise your payments become insignificant over time, then your house will be payed off, and renters will still be paying rent.
I can't see how renting gives a better lifestyle than getting a mortgage.
NoelWatson said:
off_again said:
I must admit that I don't really get the whole thing about property. Yes, I have a mortgage and a house, but that's about it. If I want something bigger then I need to earn more, its pretty simple maths for me. But why some people are absolutely fixated about house prices and their 'plan' to work up to some mansion does seem odd.
At the moment I don't really care if my house value drops by 10%. So what. I am not moving and have no incentive for a few years at least. At which I will have paid more off on my mortgage and the market should have levelled out at that point. So no problem there.
As far as I can see, the only real way of getting money out of houses is to sell up and sod off somewhere else. For example, I bought my house of a Jamaican family. Lived here for 30+ years, bought and own the house. Sell up and go back to Jamaica. Take the proceeds of the house and live extremely well back there again - seems fair to me, and given the price differences etc, they have really landed on their feet.
So people climb the 'property ladder' but for what? Are they going to see the money they have made? Is this what they really wanted? Does it really mean anything?
A friend of mine wanted to move up to the next bigger house which would have meant a £1m home. In the end he didn't do it, because he finished off his current home and got decorators in. Finished off everything 100% and ended up much happier with his home rather than moving to the next bigger one for the sake of it. Better for him, his family and lifestyle.
Property ladder? Go for what you are comfortable with - don't see the point of constantly moving up for the sake of it.
"At the moment I don't really care if my house value drops by 10%"At the moment I don't really care if my house value drops by 10%. So what. I am not moving and have no incentive for a few years at least. At which I will have paid more off on my mortgage and the market should have levelled out at that point. So no problem there.
As far as I can see, the only real way of getting money out of houses is to sell up and sod off somewhere else. For example, I bought my house of a Jamaican family. Lived here for 30+ years, bought and own the house. Sell up and go back to Jamaica. Take the proceeds of the house and live extremely well back there again - seems fair to me, and given the price differences etc, they have really landed on their feet.
So people climb the 'property ladder' but for what? Are they going to see the money they have made? Is this what they really wanted? Does it really mean anything?
A friend of mine wanted to move up to the next bigger house which would have meant a £1m home. In the end he didn't do it, because he finished off his current home and got decorators in. Finished off everything 100% and ended up much happier with his home rather than moving to the next bigger one for the sake of it. Better for him, his family and lifestyle.
Property ladder? Go for what you are comfortable with - don't see the point of constantly moving up for the sake of it.
I think you will have done very well if it hasn't fallen by more in the last six months.
"At which I will have paid more off on my mortgage and the market should have levelled out at that point. So no problem there."
But where will the market level out? Another 20% down? 30?
The advantage seems fairly obvious to me. You need a roof over your head from the point at which you leave your family home.
You can choose to pay a mortgage for 25 years and then have (hopefully) 35 years of rent free living and a large asset, or you can rent at pretty much the same monthly cost (round here anyway)for 60 years.
The whole investment side of it misses this main point I think, and also leads to the mass hysteria about values we have at the moment.
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